ZrCoin, based in Russia, says it has raised $7.07 million in cryptocurrency from 3,955 investors during their Initial Coin Offering (ICO). The offer was live from May 11th to June 9th and was hosted on the Waves platform.
The company says the funds collected will allow the launch of two synthetic zirconium production lines with a total capacity of 800 tons per month. Organizers added that the primary goal of the campaign was to raise at least $3.5 million for the construction of the first production line. ZrCoin said that high demand from investors led to additional financing, and the opportunity to increase production capacity.
In a release, the company said that investors will receive ZrCoin tokens, which are hosted on the Waves blockchain platform and which can be transferred and traded on crypto exchanges. Each token is said to be backed by 1kg of zirconium dioxide(ZrO2), sometimes call Zirconia. The main use of Zirconia is in the production of ceramics. It is also used in the creation of cubic zirconia or manufactured diamonds.
Andrey Nikonorov, co-founder of ZrCoin, said the volume of funds was twice as high as they planned.
‘”This is a huge success for the first ICO of its kind on the market. Using blockchain technology, we secured financing quickly and efficiently.”
Sasha Ivanov, founder of the Waves Platform, was quoted predicting that ICOs will exceed $1 billion in 2017.
“Transparency and reliability of blockchain technology, and the wide possibilities of open information systems, lead to the creation of fundamentally new solutions that make easier the life for businesses and private users’, added Ivanov.
Vitaliy Tsygulev, General Director of the Digital Finance Agency – the marketing firm that aided on the ICO said they encountered “initial skepticism from some parts of the community,” but investor interest was obvious and confirmed by the results.
“I’m confident that the potential of the ICO as an effective fundraising tool for projects across all sectors of the economy will be made clear in the coming years,” said Tsygulev.
ZrCoin says that after production starts, the distributed tokens may be redeemed from investors at the market price of the final product. ZrCoin was sold at an ICO price of $1.40, gradually increasing to $1.55 by the end of the offer.The market price of zirconium dioxide was quoted at $2.80 per 1 kg. ZrCoin says this provides an opportunity for investors. Investors can choose whether to sell their ZrCoin back to the company or on the open market, or to take physical possession of the zirconium that backs the token.
The offer page says that ZrCoin is the world’s first commodity backed Blockchain option. It also claims 100% cash back on demand.
Investors were able to deposit using various currencies, including Bitcoin, Litecoin, Waves and Ethereum. ZrCoin reports the breakdown of funds raised is as follows:
- 838,903 USD
- 950 BTC
- 670,290 WAVES
- 12,373 LTC
- 7,407 ETH
- 27,973 ETC.